I would like to reiterate the earlier responses urging you to seek proper representation from an elder law attorney. I suspect that you did not go to an elder law attorney to get a properly drafted caregiver agreement as he or she would have counseled you on the appropriate rate of pay. Even with a properly drafted caregiver agreement that complies with the Medicaid regulations in your state, your mother-in-law may still have an uphill battle to get a future application approved. In Massachusetts, caregiver agreements are still used, but most elder law attorneys get a formal written opinion of a geriatric care manager outlining the services that are needed and quoting a rate. Contemporaneous time slips should be completed by the caregiver detailing what services were performed. If the contract calls for weekly payments, payments had better be according to schedule. Lump sum payments for future services are typically not advisable at this point. The rights and obligations of both parties must be clearly spelled out. Furthermore, our Medicaid agency often requires verifications including the tax return of the caregiver to show that he or she reported the income. You do not want to be penny wise and pound foolish at this time - seek proper representation to avoid a denial of benefits for your mother in law in the future. Good luck.
Often the question is not how much she can pay you, but why you would want to receive money from her that will be taxed as ordinary income and be subject to self employment taxes ( as much as 50%). There are many ways of dealing with exempt and non exempt assets and while many people ask about using these types of care giver agreements, they often do not consider the tax consequences of doing so. Before doing anything like this, you need a proper agreement and to review the consequences with a tax professional.
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I suggest that you get counsel from an Elder Law attorney who can discuss the many ramifications that could harm your mother in law in the future. The question is not what is the “legal” amount you could charge your mother in law for care giving? But if her health deteriorates more, and your are unable to care for her at the level of care she requires, has your mother in law made countable transfers from other estate that will harm her from getting on Medicaid in Florida? The answer is yes. I will not even discuss your ability to care for her and what sounds like your assessment that she already qualifies for skilled nursing care. At a cost of $80-100,000 per year for just nursing home costs, nothing else, does your mother in law have the funds necessary to allow her to live the life if her health continues to fail? Pre-planning for the possibility of Medicaid should be done now. If it is decided that you could care for her in your home at this time then appropriate Medicaid planning now is important. I suggest discussing a Personal Service contract for the proposed care planning before funds exchange hands and have the attorney drafted it properly to pass the requirements of the State. Our website has further in depth information in our “articles” section.
See an elder law attorney since this subject can be complex and other issues are created that you might require further information. If you think this post was helpful, please check the thumbs up (helpful) tab below. Thank you!
My comments are not intended to establish an attorney-client relationship, are not confidential, and are not intended to constitute legal advice. Proper legal advice can only be given by an attorney who agrees to represent you, who reviews the facts of your specific case, who does not have a conflict of interest preventing the representation, and who is licensed as an attorney in the state where the law applies.
Dan W. Armstrong, Attorney
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